Cancellation of Debt

Description and Definition of Cancellation of Debt

Forgiveness of a debt without payment or consideration. Cancellation of debt is taxable as income to the debtor unless the creditor intended it as a gift or it meets certain exceptions relating to bankruptcy, insolvency, or farming.

Resources

See Also

Further Reading

• Cancellation of Debt in the West's Tax Law Dictionary
• Cancellation of Debt in “A Dictionary of Taxation”